How Labs Should Comply With New Signature Rule

Even with the 90-day delay in enforcement, all laboratories should be taking steps to comply

CEO SUMMARY: Across the nation, clinical laboratories and pathology groups are reacting to the new Medicare rule that requires a physician signature on a paper requisition for clinical laboratory tests. Laboratories using paper requisitions will need to add a signature line, then print and distribute these new requisitions to their clients. Pathologists and lab administrators also recognize that, once again, CMS officials are making a lab the “gatekeeper” to enforce its new rule; otherwise the lab may not be reimbursed by the Medicare program.

MANY EXPERTS IN CLINICAL LABORATORY AND PATHOLOGY BILLING predict that the new Medicare rule requiring a physician’s signature on paper requisitions will be disruptive.

The final rule was to become effective on January 1, 2011. However, in the last days of December, the Centers for Medicare and Medicaid Services (CMS) said it will delay enforcement of the new rule until the second quarter of 2011.

“CMS states that the new rule is necessary to end confusion about signature requirements associated with its previous attempts to distinguish between orders and requisitions,” said John R. Outlaw, CHC, the Chief Compliance Officer for Pathology Service Associates, LLC (PSA). Based in Florence, South Carolina, PSA provides billing and other support services for pathology practices and laboratories nationwide.

“Ironically, to the extent that there is confusion, it is of CMS’ own making,” observed Outlaw. “Its attempt to end the confusion has only added to the uncertainly about what referring physicians, pathologists, and laboratories must do to comply with the new rule.”

“CMS has not issued detailed guidance on how labs and referring physicians should comply with the new rule,” noted Outlaw. “In fact, there are many situations where getting an actual physician’s signature on a paper requisition may be difficult—if not impossible! Pathologists and physicians have dozens of questions about this wide variety of scenarios.

Paper Requisitions at Issue

“For laboratories and physicians who continue to use paper requisitions when ordering lab tests, the new rule is a major change,” he said. “Physicians will be required to include a signed ‘order’ in the patient record and sign the ‘requisition’ used to communicate the order to the laboratory. Plus, laboratories will be charged with the responsibility for verifying that each paper requisition includes a valid physician signature.

“What aggravates this situation is that CMS published the final rule in early November, with an enforcement date of January 1, 2011—just weeks later,” explained Outlaw. “That left little time for pathologists and laboratories to understand the final rule and begin educating physicians about the appropriate way to comply with the new requirement for a physician signature on paper requisitions.”

Outlaw next observed that CMS has greatly underestimated the major alterations in physician workflow and in-office staff duties that will be required to achieve compliance with the new rule. “To get these physician signatures will require significant changes in workflow, along with increased paperwork and headaches,” commented Outlaw. “Labs will need to find ways to do this, as will the referring physicians. What is lacking at the moment is both clear guidance from CMS and an adequate amount of time so that referring physicians can be educated about the requirements of the new rule.

Physicians Need Education

“In its comments on the final rule, CMS said it recognized the need for physician education and was committed to having its contractors start that education,” Outlaw said. “But as of now, CMS has not published any guidance on the new rule. All we have is four pages from the Federal Register saying the signature is required.

“That leaves laboratories on their own in understanding how to comply with this rule,” he stated. “Even worse, and as recently as this week, in a conference call on physician signature documentation requirements, it was reported that at least one Medicare carrier was still advising physicians that signatures were not required on requisitions as long as the underlying order had been signed in the patient’s chart.

“Another problem is that the entire burden of compliance falls on the labs,” he added. “There is nothing in the CMS rule that requires the physicians to sign the paper requisitions. Nor are physicians at risk in any way if they don’t sign. However, if the lab performs the tests ordered by the physician and the paper requisition is not signed, the lab is at risk because Medicare is not likely to reim- burse the lab for that claim.

“Thus, once again the lab community is caught in the middle of a compliance issue,” Outlaw explained. “Most labs will do the requested lab tests anyway. They have a professional obligation and, practically speaking, they can’t not do the test— but they will do so knowing full well that Medicare may not pay them for it.

Change in Workflow

“This change in signature requirements also represents a significant change in workflow

in hospitals, in physician practices, and in the labs,” noted Outlaw. “Many labs provide referral sources with paper requisitions on their own letterhead. However, most of these paper requisitions do not have a place for physicians to sign, since it was not required that they sign paper requisitions for clinical laboratory tests.

“So the paper requisitions themselves will have to be redesigned,” he continued. “To comply, new paper requisitions will need to include a signature block for the physician. Next, hospitals and physician practices will have to revisit the paper workflow to make sure that the physician—who is not generally the one completing the requisition—circles back at some point to sign the requisition before the specimen is sent to the lab.

Way To Obtain Signature

“Laboratories will need to rework their workflow in order to ensure that all requisitions are signed,” Outlaw said. “They will also need to develop a way to obtain a signature if a paper requisition is received without one.

“According to CMS, a valid ‘signature’ may be either a handwritten signature or an electronic signature,” he added. “Electronic signatures must include language such as ‘accepted by,’ ‘electronically signed by,’ ‘authorized by,’ or ‘signed by,’ etc., followed by the physician’s name or digitized signature. Stamped signatures on the paper requisitions are unacceptable.

“Labs have lots of questions about how to implement this requirement,” concluded Outlaw. “There are many other practical applications of the lab test order that need to be resolved.

“For example, what happens when a surgeon removes tissue from a patient in the operating room and sends the specimen to the lab?” asked Outlaw. “The surgeon is not going to break scrub to sign the requisition. Thus, is it okay for him or her to sign later? Is there an exception of some sort that could be applied in this case? This is just one of many case-specific questions that CMS needs to answer.”

Physicians Remain Unaware

Pathologists at the Henry Ford Health System in Detroit are dealing with all the issues identified by Outlaw. “In our city, most pathologists and referring physicians are either unaware of the requirement or confused about how to implement it,” said J. Mark Tuthill, M.D., the Division Head, Pathology Informatics, at Henry Ford Health System.

“Last month, I attended a meeting of the Wayne County Medical Society and asked a room of about 150 physicians if any knew about this new final rule,” he said. “Only one person raised his hand. I asked how many physicians were actually signing their lab requisitions. Again, only one physician raised his hand. That shows why more time for educating physicians about the rule is needed.

“Within our laboratory, we’ve looked for an information technology solution for this problem,” Tuthill added. “We have yet to come up with a viable solution that we can implement rapidly. We recognize that it will probably require a significant change in clinical workflow.

“It’s important to note that, in many cases, physicians do not actually order tests in an electronic system—even if they use one,” he added. “Often the physician’s support staff enters this information.

“Thus, even when orders are done electronically, it may be difficult to get the physician’s signature unless the physician allows the support staff to order under his or her name, violating other regulations, such as HIPAA,” observed Tuthill.

“Since our laboratory handles more than 1 million outpatient requisitions each year, this is a significant problem for our labora- tory,” he continued. “I looked through a stack of paper requisitions the other day and not one had a physician signature on it.

“Under our current compliance policies, we accept the fact that an ordering physician is required to be a licensed physician—or a licensed clinical practitioner—and has to be at that level to order a test,” said Tuthill. “Before our laboratory will act on an order, we must enter the physician’s credentials into our lab system and we are required to report the lab tests results directly back to that physician without an intermediary.

“That is another reason why the new rule is a bit baffling,” he continued. “Our laboratory already vets the requisitions we receive. These are valid orders and we report lab test results directly back to the referring physician.”

Lots Of Disruption Ahead

Like Outlaw and Tuthill, most lab administrators and pathologists recognize the significant disruption that is about to unfold as laboratories become the primary source of physician education about the new final rule requiring a physician signature on paper requisitions for clinical laboratory tests. Once again, bureaucrats at the Medicare program have taken actions which are counter-productive to patient care and will only add more cost for labs and physicians alike.

Attorney Jane Pine Wood Offers Advice to Labs on Compliance with New Medicare Signature Rule

NOW THAT THE MEDICARE PROGRAM WILL DELAY IMPLEMENTATION of the new rule requiring physician signatures on paper test requisitions for clinical laboratory tests, labs and pathology groups have a short window of time to educate staff and physicians about the changes associated with this rule.

“Labs should take several steps to ensure compliance with this new rule,” stated Jane Pine Wood, an attorney with McDonald Hopkins, based in Cleveland, Ohio. “Laboratories that never had a signature line on their requisition should now add one and reprint their lab test requisition forms.

“A second step is to educate your laboratory staff about the requirements of the new rule,” added Wood. “At the same time, laboratories should also have their sales reps and service reps visit physician clients. It is important to provide them a copy of the new rule and discuss the need to comply with its requirements.”

Other Types of Test Orders

Wood did want to call attention to the fact that the signature requirement for a paper requisition for a clinical laboratory test is actually consistent with Medicare guidelines for other types of test orders. “The Centers for Medicare and Medicaid Services (CMS) already requires signatures on all tests ordered by a physician,” she said. “Until now, clinical laboratory services have been the only exception.

“Having said that, I believe CMS recognizes that labs have many questions about how to implement this rule,” she continued. “But philosophically, the lab segment of medicine is not being treated any differently than any other segment of healthcare.

“In fact, I deal with physicians in all the other medical specialties, including primary care doctors,” she observed. “These primary care physicians are being audited by Medicare and they get marked down for failure to fully document all aspects of patient care. In that sense, Medicare is being consistent by requiring signatures on paper requisitions for clinical laboratory tests.

Rule Presents Problems

“That said, the new rule does present problems, particularly when a lab handles a high volume of testing each day,” stated Wood. “There are also situations where paperwork will lag well behind the test requisition or when an electronic medical record system is used and an outreach program gets a referral from an office-based physician.

“For some of these cases, there is no way to know if a physician actually ordered a test or if someone else ordered the test,” she stated. “If it’s a hospital inpatient, the lab is fine. But for requisitions originated in a physician’s office, it is a difficult challenge for labs that want to protect them- selves while ensuring that they get paid.

“I am hopeful that CMS will develop ways to make this rule work for all parties,” Wood said. “Further, it is not likely that CMS will back down completely on wanting more documentation. That’s because CMS itself has been inconsistent in its rulings over the years. That inconsistency has led to some confusion among labs and is why CMS has muddied all of the waters in terms of the requirements for both clinical labs and for anatomic pathology labs.

“The issue is one of payment, meaning, will labs get paid for these claims,” she said. “We hope that CMS will come forward with more guidance, but for now, labs should never delay patient care for paperwork.”


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